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Net profit or net loss is show under owner's equity section...like this...
If there is net income than it is show like this...
Owner's Equity
Capital ,
Add:Net profit7,
Total owner's Equity,
and if there is net Loss than it is show like this
Owner's Equity
Capital ,
Less:Net Loss (7,)
Total owner's Equity,
Hope that you get it
A negative on a profit or loss account will reduce the reserves in the balance sheet. The value of the business will reduce.
Asset side on balance sheet
